Vermont Legislature SmartTranscripts:

[Matt Walker (Chair)]: I'm not sure if we got that yet. So we are live. Good morning, Wednesday, 03/18/2026. Happy birthday to my sister. And we are

[Logan (Joint Fiscal Office analyst)]: working on

[Matt Walker (Chair)]: T bill today as long as, well, at least for the foreseeable next four to five hours or more. And I guess one place to start, I didn't see the time on the email. I didn't look in there. There were some suggestions last night. I don't know if you were able to work out some updated language, or do you need more time on that? Representative Lalley, Burke, the agency We

[Patricia McCoy (Member)]: have it.

[Matt Walker (Chair)]: Yes. We ready to show it to everybody else?

[Logan (Joint Fiscal Office analyst)]: There.

[Matt Walker (Chair)]: Let's start there then.

[Logan (Joint Fiscal Office analyst)]: Okay. If

[Matt Walker (Chair)]: that works for you.

[Patricia McCoy (Member)]: It's looking.

[Matt Walker (Chair)]: Unless you have another one. I'm sure it's fine.

[Damian Leonard (Office of Legislative Counsel)]: Or let me put that in between. Just a second. I'll put that language into the draft.

[Patricia McCoy (Member)]: Great. Okay. Great. Thank you, Michelle. You're welcome. Thanks so much.

[Matt Walker (Chair)]: Lynn, could you make me a cohost, please?

[Phil Pouech (Ranking Member)]: Will this be different than what's posted on our page now if you added something to it?

[Unidentified Committee Member (possible Jim Casey or Ken Wells)]: Can you try

[Logan (Joint Fiscal Office analyst)]: to answer?

[Matt Walker (Chair)]: Will. Yeah.

[Josh Hanford (Vermont League of Cities and Towns)]: Yes. We're

[Damian Leonard (Office of Legislative Counsel)]: alright. So let me share the screen here. For the record, I'm Damian Leonard from the office of legislative council. So yesterday, if you

[Matt Walker (Chair)]: remember, we

[Damian Leonard (Office of Legislative Counsel)]: were looking at the provisions of the Vermont statutes relating to procedures for establishing traffic calming measures I'm sorry, establishing speed limits. And the proposal overnight, it was to also identify potential opportunities to simplify and clarify those provisions to assist municipalities in meeting local needs, including safety and contact sensitivity. See that there?

[Patricia McCoy (Member)]: Page is up, Amy.

[Damian Leonard (Office of Legislative Counsel)]: This is on page two of and this is I have not gotten this to the committee yet. So if you just bear with me here, I will send it to the committee. But yeah.

[Timothy R. Corcoran II (Vice Chair)]: Sent that off. I know that

[Damian Leonard (Office of Legislative Counsel)]: because we're without Gabby this morning, we've got a little bit of a delay on getting things posted. So bear with us here, but we've got the language up on the screen here at least for you to look

[Logan (Joint Fiscal Office analyst)]: at. So

[Damian Leonard (Office of Legislative Counsel)]: were there other questions on this?

[Matt Walker (Chair)]: The main change from yesterday to today?

[Damian Leonard (Office of Legislative Counsel)]: The main change from yesterday to today was that three here used to be one long sentence that said examine the provisions in the Vermont statutes related to the procedures for establishing speed limits and identify potential opportunities to simplify and clarify those provisions. And then the language that's been added is to assist municipalities in meeting local needs, including safety and contact sensitivity. Think we had to assist municipalities in meeting local needs yesterday. We've added including safety and contact sensitivity.

[Matt Walker (Chair)]: I just wanted

[Kate Lalley (Member)]: to say I really appreciate that you kind of broke those down into two different tasks. I think that is because they are the two different approaches and they sort of take two different pathways. I think that it really captures what we're after and hopefully provides direction that everybody will find helpful.

[Patricia McCoy (Member)]: Members number? And just to add to that, my concern was that people are gonna be looking at speed limits of, we're gonna limit speed limit, no we can't.

[Timothy R. Corcoran II (Vice Chair)]: And

[Patricia McCoy (Member)]: to be able to look at the whole picture, maybe it's not speed, maybe it's something else. It's some kind of extreme design, maybe it's whatever. It just sort of opens the door for not just looking at speed itself, but looking at the whole picture, contest sensitive.

[Phil Pouech (Ranking Member)]: Representatives? Yeah, I mean I've been speaking for a few years now, and how can we get, in our town as 116 enters, how can we get traffic calmed? And I would like to have done more, but this is an incremental move toward totally understanding how speed limits are set, And I'm hoping we get a good amount of information back that says here is how we can help towns like Ganzburg that want to reduce the speeds and make it safer. So it's an incremental step in that direction.

[Matt Walker (Chair)]: Okay. I did ask Motley's Cities and Towns. Gabrielle is not whether she worked on it yesterday. It's not on the agenda, but I did ask her yesterday to put it on the agenda. And with the translation between that, to Megan, to Lynn, I want to be very clear. Vermont Louisiana City and Town is on the witness list for this and for the local options tags. It's not updated because of personnel change, not because we don't generally take questions from the audience except from the agency or JFO or alleged counsel. So it will be updated because I did ask for it to update. But with the situations that happened last night, it's not there. But we do not generally take comments from there. But I would ask you to speak on this because of that. I asked you to be on the witness list for this morning. If you would like to speak to the language and the piece real quick, I would appreciate it.

[Josh Hanford (Vermont League of Cities and Towns)]: Director Josh Hanford, well, big issues and challenge. I think the change is fine. It works. I think the most important part in all of this language is about the recommendations for legislative action. Between ten years as either deputy commissioner or commissioner of House of Development probably submitted over a 100 reports, legislative reports, and they don't have a legislative sort of recommendation to take action. I'm not sure if that information is really able to be absorbed and addressed and put into action because there's so much coming at you guys from so many different places. And so that's the most valuable part of this statement. Okay.

[Matt Walker (Chair)]: Thank you. The agency submitted the language or helped work with it, so I don't know if they wanted it. We're all set. Representative Lalley, I'd like to, or not, perhaps.

[Kate Lalley (Member)]: I could make a motion that we put this in our T bill.

[Matt Walker (Chair)]: All those in favor, all the thumbs up time. We instructed our alleged council to add it to the next drafts of the T bill that we'll be looking at later today and later this morning. I think that there is language. We want to move on to the local option tax piece. The language that we saw last week related to specifically the idea that above the pilot fund being fully funded, and when it is all of the pieces that are on there that it has to go to and there is left in a balance, But as the increase that comes in annually, not to touch the balance that's there, not to touch it unless it's already fully funded and all the towns that have pilot payments are with prisons, with forests, with the different provisions, after everything is paid, after everything is collected, and for that annual amount that comes in, not the surplus, not any of the other pieces, moving forward, we are looking in this language to take 50% of that additional over and above on an annual basis and send back through town Highway A to those communities, to the town Highway A program to help towns with the increasing costs that they face. We'd be finding mitigation, struggles, maintenance and peace, and it's our, what I would like to see us do is that we always try as a committee to find a way to help towns. And last year we did it through the inflation escalator. And this year we know that 12 more towns, 19 considered it, 12 more towns have added a local option tax that will be coming. And I think that given that this is a special fund and that it came from towns and we have a network to support, that I think that that's the direction that I'd like to see the committee go. I know that we've been there. I asked Representative Pouech to update us on perhaps if he don't mind, attended their rural caucus this morning where it

[Phil Pouech (Ranking Member)]: was discussed further. Well, Rec White was there too. She's a member. So just generally, I think generally the World Caucus would like to see what's the state takes from local option tax go back to the towns. There was discussion of like, using it for one time items for other things that really should come out of a general budget, general fund. So I think there was generally some agreement that this isn't a bad approach. They did ask why 50% of the surplus, why not 100%? So I think that shows some support for it. And just to clarify, we had a little discussion. I had asked the question, is it 50% of what's left in the balance of the funds surplus or 50% of what was surplus per year collected. And this is per year. So it's not gonna reduce the fund balance that's in there necessarily. It will just take 50% of what was collected that year over and above what was required.

[Matt Walker (Chair)]: I'd like to go to Vermont Leagues of Cities and Towns at this point for comment, whether we wanna switch chairs or not, and then you'll be able to bring up the language for questions, particularly right after. Absolutely.

[Josh Hanford (Vermont League of Cities and Towns)]: For the record, Josh Hanford, from League of Cities and Towns. I also spoke to the rural caucus this morning with senator Westman. We had a a a pretty lengthy discussion just about what the local option tax process is, why there's so many more towns adopting it, which is because the law changed a couple years ago to allow towns to vote to adopt local option tax at the voter level and not have to submit a charter change, which had been the requirement up until a couple years ago. Since then, we've seen seven towns the very first year approve local auction tax, and last year, it was actually 13 out of the 20 that had it on. And some some of those other towns that didn't approve it were very close votes. The facts on the ground have changed. Even smaller communities can benefit since the Wayfair decision. You know, all online purchases collect sales tax. So even the smallest towns, some in Windham County, really small towns are adopting local option tax. And even though it's not a huge revenue source and a small budget, it's a big difference. Majority of the municipalities in Vermont, their largest bottom budget item is transportation. So this is a very important conversation. We know the situation, you know better than most, how we're not drawing down all of our federal match. The transportation budget is in kind of a tailspin because of what we use to fund it. And this is a small step in the right direction to correct it. I would not be honest if the league didn't wish there were other options and this isn't our first choice. The local option tax is something that voters at the local level approve. They keep 75% and they send 25% to the state to pay for the pilot funds, which is all the law says at this point, a payment move taxes for those municipalities that post state buildings and properties. You received a overview of that the other day. The law says nothing about using it for one time funds here and there. The last couple years, most of those one time expenditures out of it have been for tax expenditures that the state used to pay out of its general fund. It wasn't new additive money from municipalities. We're very offended by that, concerned by that. Even the pilot payments that the state is paying property taxes in lieu of taxes is still coming from the local taxes raised at the municipal level. So the concept of this in general is not returning the funds to the municipalities that have chosen to raise taxes on themselves. However, we don't have any other there isn't other proposals for us to support or oppose in regards to this, in regards to returning all of the surplus back to municipalities and letting them choose what to do with it. That's not on the table. That would be our first choice. Also, there isn't a discussion in the tax bills about reducing the percentage from 75 to 25 so that there isn't a surplus. We would also prefer that to be the first choice. But this option of returning 50% of the surplus to towns to enhance the tight town highway aid is something that benefits our members and we can support. Like I said, it's it's not our first choice, but there is a formula that fairly distributes this to municipalities. Every municipality benefits based on their number of road mileage, plus one, two, and three. So it is a fair distribution. We're up to 50 municipalities with local option tax now. I suspect that there's gonna be a half a dozen or more each year. And, since the law that the voters in the towns are evaluating whether to approve this says nothing about expanding the surplus on sort of whatever, idea comes out of the legislature each year, at least adopting something like this that says 50% of the surplus shall go to town highway aid will help municipalities understand and their voters understand where the surplus is going. Because I think if you did a poll, they would not suspect that, there's been a surplus for three years of money that's been over collected with no plan to spend it. And when they're voting on it, they didn't vote on, that money doing anything other than paying the pilot obligations. And so at least this would have a chance for the voters at the local level to understand cause it's in where a portion of this, of this, pilot payment goes. And so from that perspective, support the language you're considering, as a place to more rationally use this overpayment of of of pilot funds, from local taxes, and recognize that, you know, all municipalities will benefit in at least a fair way. And hopefully, that will also generate conversations in other municipalities knowing that they have major budget challenges in the transportation sector. I mean, you know, I know stats from the town of of Bennington that their transportation budget this year is below what it was in 2017 by more than half. So there are real challenges out there in transportation budgets at the local level, and this is a a start of conversation to help address that. So appreciate the effort.

[Matt Walker (Chair)]: I appreciate your flexibility to come in this morning and work through it. Could you comment on your thoughts about why or where you're at with the need in terms of

[Josh Hanford (Vermont League of Cities and Towns)]: distributing support for the entire network as opposed to just the originating towns? Clearly there is some tension there between those municipalities that raise the local option tax and those that benefit. The fact is we've already sort of made that decision in the law. The towns that adopt local option tax aren't necessarily the same towns that benefit from the pilot paper. There's some overlap, but there's many more towns that benefit from pilot payments that don't raise local option tax. So we've already sort of crossed this bridge in some ways And that the town highway aid formula, one could argue, is is is even more fair than that distribution knowing that, you know, some smaller towns might not raise that much local option tax, but they still have road needs. And then on the flip side, you have towns like Asto that raises substantial local option tax and they share it with the entire state just like they would suggest they share their property taxes, quite generously with the state. It's also true that they have a pretty extensive road network that needs lots of support and aid. So they will also benefit for some percentage of the new town highway aid that is being shared with the rest of the state where they're not now. If if we do nothing like this with the surplus, they're not benefiting from what they're raising to support their town highway needs in any way.

[Unidentified Committee Member (possible Jim Casey or Ken Wells)]: Representative Ford? I would also argue that surrounding towns, for example, around Stowe are actually paying that local option tax when they go and shop in Stowe, or they go and shop in the other towns, because they don't have that in the small communities. They don't have a local grocery store, and they don't have retail to go shopping. So citizens are putting in to the local option tax. I think it's a fair distribution for

[Josh Hanford (Vermont League of Cities and Towns)]: the That's absolutely true. A lot of towns are feeder towns. They have networks to maintain. It's it's also true that many small towns have increased deliveries, you know, from online purchases, more and heavier trucks driving on class three roads to deliver parcels that we didn't have twenty years ago. That have adopted local option tax with the online sales or at least contributing to that. And that would be an argument for towns and the voters to decide themselves whether that increased road maintenance and cost because of home deliveries because they don't have a commercial center is worth a local auction tax in directing that money to help support and maintain those road networks, I think is a increasing conversation that I hear when we gather our transportation policy committee every two years to set our BLCT's priorities for transportation. We take volunteers from all size communities to work all summer on what our policies are for in the transportation field. And I heard that two summers ago for the first time from a number of smaller communities that their road commissioners, road foremans, their actual people that are maintaining it, seeing a direct correlation to more frequent and heavier vehicles on roads that they didn't see in the past.

[Patricia McCoy (Member)]: Ms. Burke? A little off topic, but you mentioned it. I mean, I had sort of pointed eventually looking into the deliberation. I'm thinking that sometime down the line, might hit the 6th Floor the option because you're talking about the trucks turning the roads and stuff like but the world thing that's happening. So we'll bring that.

[Candice White (Member)]: And just a comment on that, I think the committee's aware, but we've got the towns who have these dirt roads, which are getting more use and heavier use from deliveries. We've also got a network of private roads, which are paid for by individuals and associations, which those bills are just continuing to go up every year. So those citizens, I speak for myself, I live on a private road where our biggest expense is trying to keep our road drivable. With climate change, more freeze and thaws, more deliveries, it's just, again, expenses are going up, and nobody's paying for that except for citizens.

[Josh Hanford (Vermont League of Cities and Towns)]: Yeah, great comments both. Speaking of study committees, there was a study committee a couple years ago that VLCT was R and I was represented, looking at revenue options for public transit, and the parcel fee came up as that one of those areas to consider. And our comment was that might be an appropriate source, not for us to decide, but if it only goes to all public transit, it's not addressing the need because those public transit buses also drive on the municipal roads and the bridges. And if they can't drive on on bridges that are waitlisted or roads that are maintained during the mud season, that public transit system doesn't work either. So that, you know, a fair distribution of any sort of new revenue to the transportation system across town highways would always be our position. It can't just go to one sector of transportation because, as we've said, you know, whether you drive a car to work or school, you drop you take a public bus to work or school, or you walk to work or school, you're using municipal transportation networks. Any one sector zeroing out for a certain type of revenue doesn't, address all the needs. It's really an across the board revenue source for the whole system that's needed at this point.

[Matt Walker (Chair)]: Anybody else? All right. Thank you. Thank you very much for coming in. Thanks for the good piece. Anybody have any other questions or comments? That would be it. Make a motion to I'm sorry. We want to go over it again, we can. I know we get Oh, no. We did. Damien, maybe you can bring it up. Come up and bring it up, and then we'll go to Representative Tomlinson's question at the same time.

[Chloe Tomlinson (Clerk)]: Yeah, I'm just trying to understand kind of the proposed formula and wondering if, based on the data shared by JFO yesterday, if we could have an example of how much of the fund would go to Town Highway based on FY '26 over FY '27. Is that possible? Because I'm just not really following exactly how this amount of money is being calculated that would go to Town highway. I don't know who that question is,

[Matt Walker (Chair)]: do Okay. For a second. My He's given We'll go there. I just want to from what I at least and then he'll so I want make sure that I understand it as well. But my projection is the projected revenues are going to go from 14.8 to 16.2 next year. We're not going to affect the budget. By the way, the effective date is not to address the budget for this year. It would be to start fiscal year of next year. And the revenue in this, the consensus revenue from the JFO says the pilot's gonna go from 14.8, 14.9 to 16.2. So the revenue is expected that the 25% share of local option tax will increase by about $1,300,000 And if that were the case, then out of And SNFs, the estimated expenses for the pilot are gonna come across basically at the same, with that $1,300,000 increase, it would be about $675,000 to go back to town Highway 80. It's the way I understand it. But I've looked a little bit at that. I don't mind taking a comment here since you're still up.

[Josh Hanford (Vermont League of Cities and Towns)]: It's just a point of information Josh had to begin. The actual dollar amount, I don't think anyone can answer because it's based on a budget that's not yet approved for some of the uses in there. So the percentage would be based on decisions that this body makes between now and adjournment. Sure. I'm just

[Chloe Tomlinson (Clerk)]: trying to understand if it's based

[Kate Lalley (Member)]: on the

[Chloe Tomlinson (Clerk)]: anyway, maybe it's worth looking at with Logan. Like, estimated fund balance versus the actual projection of revenue, like the increase in revenue versus the balance, which is different. Because what I'm seeing is like the estimated fund balance at end of FY '26 to the estimated fund balance at the end of FY '27, that's like a $40,000 increase as opposed to this increase in revenue because of the additional things that we're spending. Anyway, I'm just trying to understand because there was a point earlier that it wouldn't affect the fund balance of the packet fund.

[Matt Walker (Chair)]: I would say that that is not my intention to go But after the what I'm hearing is that other areas, other groups, the law is not set yet. Other people have already pilfered this fund, there's other people coming at it. There may be less there than what we hope. We don't have an exact figure, but my intention is that we will take half of that increase

[Chloe Tomlinson (Clerk)]: The half of the increase

[Matt Walker (Chair)]: on per annual of new revenue. Half of

[Candice White (Member)]: the new In the revenue revenue, okay.

[Matt Walker (Chair)]: To go to because the pilot isn't going to change by the pilot itself. These other one timers and the other pieces keep coming We're in on trying to go after the increase in new revenue from the additional towns, 50% of that.

[Chloe Tomlinson (Clerk)]: The revenue, not the balance.

[Matt Walker (Chair)]: But other groups are going after this fund and using it for other things. And I'm suggesting we don't want to be in that fight or not, or maybe we should. But I'm saying we're trying to put a predictable piece to build on the budget moving forward. But I'm not trying to go into a fund that exists, the surplus right now.

[Chloe Tomlinson (Clerk)]: I think I understand now. Thanks. I just wanted to clarify what

[Matt Walker (Chair)]: you're saying. I understand it.

[Unidentified Committee Member (possible Jim Casey or Ken Wells)]: We're not going after the balance that's there now. So going forward, if they're projected to be 1 point some odd million dollars there, and we're asking for 50% of that going forward. So every year, whenever this pilot money comes in, we want to take 50%

[Phil Pouech (Ranking Member)]: of it and put it for instance,

[Logan (Joint Fiscal Office analyst)]: Town High.

[Matt Walker (Chair)]: 50% of the increase in

[Logan (Joint Fiscal Office analyst)]: revenues are above where we are Okay, thank you.

[Chris Keyser (Member)]: Okay, so this is a good discussion. So we're not even considering what the underlying expense is.

[Matt Walker (Chair)]: No, I'm saying that the defined law of what the pilot is, is consistently the same year in and year out. We know how much property we're paying for. There is a slight adjustment with the CLA every year, and it goes up a slight amount, up or down a slight amount each year. But that number is flat, and the surplus has grown. Other laws and appropriations have gone after that money. I'm saying we know that the expense is whatever the number is, and we're getting new money in. I'm saying from this date out here, regardless what other people do, we want 50%

[Chris Keyser (Member)]: of the new money. Okay. So we go along and we're five years, eight years on, and we've basically exhausted the number of towns that are going to come in. So there won't be an increase unless there is an underlying increase in value of the taxed event. So anyway, this will go on for a period of time until such time that the towns and cities stop doing Well, sure it is. You would have more additional question.

[Matt Walker (Chair)]: If it's a stop, it would be the attempt, it would be 50% of the above the amount of the pilot. So if it gets to 4,000,000 to 8,000,000 to 10,000,000 or some number, it and levels out at 10,000,000, we're still gonna be getting 50% of the above the pilot expense.

[Chris Keyser (Member)]: Okay, so you're not just saying the increase from year to year, talking about, okay, gotcha.

[Matt Walker (Chair)]: I'm trying to say we're drawing a start point and moving forward, but

[Logan (Joint Fiscal Office analyst)]: I- gotcha.

[Matt Walker (Chair)]: I guess I'm saying that other people will, other appropriations will be going after other pieces of that money and the surplus. We're trying to put a statement claim in the amount above the need of the pilot fund. I I could say there's a whole bunch of other pieces to it. Like, think that the fact that the prison one time adjustment of $40,000 from 1997 money is absurd, that that number should be dramatically higher and should have grown by inflation. What are today's dollars of that? I I think it's amazing that we think somehow that town's burden is the same money as it was in 1997. But I'm not a pilot expert, but I sure have some interest if I were to happen to come back to look at some of those things. I think that it's probably not that well understood that we've decided to use this town money to pay for listers that we used to pay out of the general fund when I think it was pointed out that when they voted for it, they didn't expect that that's how the money was going to be used. I think that $40,000 number ought to be substantially higher. I think the towns that were shorted for years when we didn't have the fund fully funded should get their money back. They were shorted for only three years if we didn't pay it in full. But there hasn't been any discussion of giving the money that affected the IOU that those towns have. So I guess you can feel my frustration that I think the entire area has been underrepresented from the town's view. And I am trying to push that one of our goals in the committee is to help towns. And I think there's a whole lot of injustices in this fight and how it's been managed. I would be very clear, I think it's incredibly unfair to the towns. I'm trying to help us fight for the towns moving forward without getting into the fight of what happened before. I'm not sure if I'm answering your question, but I think you can see where I'm coming from.

[Chris Keyser (Member)]: I would agree in all those parts. Just I wanna make sure that I understood and that the sense was that you were gonna run out of roll after Well, a

[Matt Walker (Chair)]: does the language actually reflect what you were talking That's a good question from my perspective. If we stop adding new towns, it doesn't mean that we'll stop 50 getting percent above the pilot costs. Does the language reflect that?

[Damian Leonard (Office of Legislative Counsel)]: Yes. So the language in the bill provides that whatever the surplus is after you've paid out the pilot payments and the grand list stabilization payments, whatever that surplus is, that's available, 50% of that. So and that's each year's revenues. So we're not talking about surplus remaining in the fund because that can go up or down. And one of the pieces here too to keep in mind is that if you have a significant recession, you may say, see a year where there is no surplus revenue. And so that would pause these payments. But then the next year when revenues recover, these payments will be whatever 50% of whatever is above the amount that has to go out to make the pilot and grand list stabilization payments. And so if no new towns are adding local option tax, but they're all keeping the local option tax they have, as long as those tax revenues stay consistently above what the pilot payments and grand list stabilization payments are, you will see some revenue going to town highway aid.

[Matt Walker (Chair)]: Why don't you remove the line before represent Burke, then we'll come to represent Pouech.

[Patricia McCoy (Member)]: We'd be curious if you may remember that. What's happening to the extra 50%? Is it just going in?

[Damian Leonard (Office of Legislative Counsel)]: The the extra 50% would go into the fund. It can also be used one time by the legislature. But that also basically, by putting some surplus into the fund, you're providing that there's something in the fund if you do have a downturn in tax revenues to ensure that towns are still getting those grand list stabilization and pilot tax payments. So for example, if next year we only collected half of what we need to make the pilot payments and the grandless stabilization payments, the remainder of that would have to come out of the pilot special fund if there's enough in there. And so this ensures that you're putting some into savings, similar to what you would do with your own income. You pay your bills, you pay for the things you want, and then you hopefully are putting some of the savings too. That's the sort of model here.

[Patricia McCoy (Member)]: Especially with random stabilization that could do on credit.

[Damian Leonard (Office of Legislative Counsel)]: That amount will go up and down over time. And the pilot pilot payments will fluctuate too as their the CLA adjustment and other things go on. But this is designed to basically say if your revenues meet the pilot and grant list stabilization payments and there's extra, we'll take 50% of that extra to put in the town highway aid and then divvy up among the towns. And Logan can give you a better idea of what those funds are projected to be. But it's designed not to put additional stress on the fund in a recession. But when when revenues are good, it's designed to put those out to towns so that towns can do more with this money.

[Matt Walker (Chair)]: Represent that.

[Phil Pouech (Ranking Member)]: Yeah. I do support this. And I think if we take away the one time spending on this fund and it's likely to take pilot and the other items with the added towns now adding in, I think there will be a stimulus going forward. And even if it's, you know, this next year and half of it goes to town highway, you know, that's a couple percent more. So that town highway aid is all state money. And it's gonna be always difficult to add more money to it because people are gonna wanna use state money to get federal money. And we did add an inflation factor a couple of years ago that added 2.7% this last year. And then you put this to it, I think it at least keeps the town highway aid from sort of from falling way behind. It helps to just keep up with expenses, maybe not as much as needed, but I think it's critical for our municipalities because they're hurting and they're unable to maintain what they have.

[Matt Walker (Chair)]: Yeah,

[Candice White (Member)]: thank you. Okay, so I just wanna clarify. So looking at the chart from yesterday, there are one, two, three, four kind of legislated payments that the pilot fund is currently supposed to be paying. The general pilot, the correctional facilities pilot, the Newport and Springfield correctional facilities, and the municipal brandless stabilization. And then the other three costs we saw telecoms valuation, town highway, non federal disasters, and reappraisal and listing payments. Those are all payments that the legislature has seen this money and decided we're gonna take that money and put it in these buckets. So we're trying to prevent that from going forward. I guess my question is, are we sure we don't wanna go after, go after is not the right word, Request that we direct 50% of the current surplus as well as 50% of ongoing surplus because, there is a pretty big surplus. Know that it sounds like policy to keep a surplus, but $13,000,000 is a lot of money, and that could really jumpstart the town highway funding. So I'm just proposing that. And I guess the other thing, which I thought was beneficial, rural caucus this morning was asking why are we not asking for 100%? I would be in favor of increasing our ask.

[Unidentified Committee Member (possible Jim Casey or Ken Wells)]: Let's just take it a while.

[Matt Walker (Chair)]: I appreciate your comments. I'm not sure if you're looking for me to respond. I love when we have a very solid nonpartisan issue that's helping towns. And that's been a goal since I've been in the two years, finishing my second meeting, coming into our second year of being in this position. It's always been a hell of a goal to find a way to help towns. I didn't ask the alleged counsel to go to that number because I'm trying to find a way that would put us into the discussion in a way perhaps that would put us in a better bargaining position. That's certainly where my mindset would be. Don't know what else is going on in bills, and I don't know what else is going on in money committees. They've already shown that this money is being targeted, And my main goal is to get a stake into that argument for the towns. And I think there's a lot of support for that. I'm open to whatever we think is reasonable and possible, but I'm only trying to offer a reasonable solution. I did want to go to Logan if he wanted to make comments about anything that's money wise going on, but I also could look at Representative Lalley first or other comments to do that. I don't know if you want to clarify any of the conversation, or if it's just to confirm where we're at.

[Logan (Joint Fiscal Office analyst)]: Yes, for the record, let me remember in the front fiscal office, as I understand the language of Bennington correctly, there are sort of two sections that you're accounting for when you're thinking about payments going out versus revenue coming in. 50% of that would go to townhouse for highway agents you mentioned. The one thing I flag is on the document that was presented yesterday, there's the line eight, the reappraisal of missing statements. As I understand it, the current language does not account for that, that is an ongoing expense

[Matt Walker (Chair)]: from the

[Logan (Joint Fiscal Office analyst)]: fund of $3,400,000 The language you have right now doesn't take that into effect. The difference between how much money would go to town highway is very different if you account for this additional $3,000,000 As it's currently written, it would be roughly $1,700,000 would be 50% of the surplus. But if you sort of do that math, you're only looking at a total surplus of like 3,500,000 So if you just then subtract out the 3.4 for this new appropriation that occurred in the PAA, you're looking at a much smaller surplus. As it certainly stands in with current estimated revenues, right? Is all just sort of a guess. If you took half of the surplus not accounting for this $3,400,000 going for the reappraisal and listing payments, the fund would be running a deficit essentially. If you took half of the surplus away and put it towards Town Highway 8, they would only have 1.7 thereabouts remaining while they have $3,400,000 that they have to spend on. So you would slowly decrease the budget given current estimates. Again, the budget is still being worked on. Nothing is set in stone. These are all estimates based on future forecasts, but that might be something that the committee wants to consider when they're proposing their language, is what do you actually account for when you're determining what the surplus every year is?

[Matt Walker (Chair)]: Thank you. Representative Lalley?

[Kate Lalley (Member)]: Yeah, I guess I'm a little worried about the perfect being the enemy of the good here. This seems like what we've been talking about, I'd love to know more about it to make a decision, but that's just my instinct right now. I feel like we have a very, very defensible position right now. The stake in the ground is a really good set of floor.

[Patricia McCoy (Member)]: And I think one of

[Kate Lalley (Member)]: the most important things we've done this year is just making everybody aware of, as I like to put it, the crisis that no one is paying attention to. And I certainly have risked annoying people by talking about it that way many times this year. So I think that this seems like a very solid thing, and I just would love to know more about the pros and cons of asking for more, which I completely support in the abstract. So I think that's kind of where I am, if that makes sense.

[Matt Walker (Chair)]: I would throw out that I'm not certain that the body really understands what we're doing with what I would call the town's money, but it's not. The law says 25% of it's the state's money. So the law does say it's the state's money to do what it wants to do with their 25% apiece. But I am leaning towards the part that when they vote for the 70 five-twenty five split, they think that 25%, as we heard, is going to the pilot to help pay for where the prisons are, where the forests are, where the state buildings are. But we're way beyond that, and it's already been used for multiple other things that are not part of that original language. My goal is to force ourselves into this conversation. And if somebody wants to strip it back out, I'd like to see them defend it and have this conversation. Why we have created a situation that's not in the law to take the money originally was set on 7525 and not to take it to the towns where it came, where there is a desperate need. I don't see anybody else, anywhere else, coming on with ideas to help town highways at the level I don't want to that's not fair. Beyond the proposals and the efforts, which I appreciate, that new revenue may be needed for that And that's not a political reality right now. Nobody else is coming with solutions to help towns. I want to be fair to the retail delivery fees and the gas escalators and the other funds that we've looked at. But with the political reality knowing that new revenue is not going to get through the building, I don't want to force a conversation as to why this money that we're already getting from towns isn't going back to the towns beyond after the obligation that was set. So that's where I'm going. I appreciate what you're saying. I think if we went and said we want half of the all of the $13,000,000 and we wanted 100% of the additional money, I I don't know that we would be taking that as fair to the process of the other PT group out there. But that's me. I'm generally a compromise. That's why I also think it should be next year so that it can time for it to shake out. Also, to drive the conversation of who else is going after this money, I don't know that I knew all of this money was taken out of here before. Think I everybody in the whole building should know what we're doing with this money. I'm willing to push it through and have the money to the knees explain to me why. Explain to the floor why this isn't town money. That's where I'm coming from. And I'm looking for the support of the committee to help drive that conversation. I really don't think that people understand that fixing the T Fund, which has been a tremendous work by a lot of people in this committee and beyond, doesn't fix any of the town highway needs, town structure needs. It does not help with that at all. There's no mechanism that increase in T funds helps the towns. The formula is the formula. We have to make an action every year, correct me if I'm wrong. We have to make an action every year if we want to do more help to the town.

[Phil Pouech (Ranking Member)]: We have the inflation outside of there. But

[Matt Walker (Chair)]: Which we as a committee did last year, because nobody else is looking out for the towns. And I don't want to say nobody, obviously the town, but in this building, for our relationship, that's what we're trying to do. And I'm hoping that everyone could go with it. If you want to make some changes to it, I'm open to that. I just was trying to find a position that I felt we could defend as a wholeheartedly as I just did, or I think I tried to do.

[Timothy R. Corcoran II (Vice Chair)]: Yeah, Lauren brings up a good point. We probably should say, what is the surplus? So I would probably recommend after the general pilot, the correction facilities pilot, the Newport And Springfield Correction Facilities and the reappraisals and listing payments are fully satisfied, anything above and beyond that should be considered a surplus. I think those are the core four that we can put our stake in the ground after those are unfunded because the rest are considered one time funds. And the reappraisal might be considered a one time, but it sounds like that's moving forward with a permanent stake in the ground. But I think that should be sort of like the baseline. Anything after that in the following years, that's what the counts are gonna get.

[Matt Walker (Chair)]: That's probably the practical reality of where we're at. I would say that I suspect I can hear the town saying, Boy, how did that not become our money? But think we are trying to, I'm trying to go in the direction of what's a practical world of some peace every year, incremental health. So I appreciate that. I'd like to hear what other people think. Represent White.

[Candice White (Member)]: I'm wondering if Logan could give us a little bit more substance regarding the reappraisal and listing payments. I thought we heard that those had been paid for in the general fund. It's 3,400,000.0 in the BAA, 3,400,000.0 proposed in the '27 budget. Are these payments expected to be at that rate going forward? And is that an appropriate and legislative use of the pilot in the first place? Or is that something that's been added this fiscal year?

[Logan (Joint Fiscal Office analyst)]: I don't know that I can speak to him about don't without that type of banking,

[Matt Walker (Chair)]: he would like to

[Logan (Joint Fiscal Office analyst)]: know that or Chris are more familiar with how and why that came up. I do know what you mentioned about it. Used to be paid from the general fund. In the BAA, they moved in to pay from the pilot fund. I couldn't speak to it in more detail about that.

[Matt Walker (Chair)]: We did hear that it was not in the original pilot language.

[Timothy R. Corcoran II (Vice Chair)]: But they want it to lay in there, This is okay.

[Candice White (Member)]: I guess I'm questioning, is that something we want to support, or is that something that feels like it's outside of the intended

[Timothy R. Corcoran II (Vice Chair)]: My recommendation was to support.

[Candice White (Member)]: Support it for certainly '26 and '27, I mean it's there, but going forward as well?

[Matt Walker (Chair)]: I would suspect that overall that a lot of people didn't understand once we just made But each of that it's not part the original pilot language, but it is settled. And those are powers that are, I straight on, those are bigger than what I think we can take on, I could do on in that perspective. I just want to make sure everybody else has got a spot.

[Candice White (Member)]: I have one other Logan, I didn't know whether you had a chance to check whether Rutland is part of the town highway aid program, knowing that both Rutland and Burlington have LOTs but don't share them with the state?

[Timothy R. Corcoran II (Vice Chair)]: Most of those

[Logan (Joint Fiscal Office analyst)]: cities have received

[Candice White (Member)]: have received? Money for rent.

[Logan (Joint Fiscal Office analyst)]: Can find all of it on the agency website. Have a document that will show you all the accounts and all the money they've received out there.

[Candice White (Member)]: Okay, because that also feels to me like if they're not sharing into the state that 25%, then I guess I question whether they need to benefit from town highway. But maybe that's just a bigger it's confusing us I too

[Matt Walker (Chair)]: think that learning all of the pieces of pilot has been quite a positive for me. I'll take your comments.

[Josh Hanford (Vermont League of Cities and Towns)]: To answer Director White's question, Rutland and Burlington have special taxing authority, but the 1% local option tax that they have works the same way as everyone else's local option tax.

[Candice White (Member)]: So it does come back to the, they do contribute that 25%?

[Josh Hanford (Vermont League of Cities and Towns)]: Only the 1%. They have other taxing authority that they manage themselves and keep it all to themselves.

[Candice White (Member)]: Okay, so they have a LOT plus.

[Josh Hanford (Vermont League of Cities and Towns)]: They have a LOT tax rate.

[Candice White (Member)]: Okay, thank you for that clarification. On

[Josh Hanford (Vermont League of Cities and Towns)]: the question of the reappraisal listing payments, the 3,400,000.0 that was approved in the BAA and is under consideration in the '27, we would strongly object to having that permanently made. In fact, there's a letter going to the approach to me blocking that in, it is above FIREE age before you calculate the 50% essentially negates the value of this aid, certainly until a number of more revenue comes

[Matt Walker (Chair)]: in, and we couldn't support that.

[Chris Keyser (Member)]: Representative Keyser. Given the fact that lot of these funds sort of develop surpluses, that allocation of monies to reappraisings, is that spent? I mean, is that obligated?

[Matt Walker (Chair)]: That's going over there. And the answer is yes. That was part of the BAA and that

[Chris Keyser (Member)]: would remove No, I get that. But then are we getting it out the door?

[Matt Walker (Chair)]: Last year, already spent money and we're already spending it now. That's the testimony that we heard from

[Damian Leonard (Office of Legislative Counsel)]: JFO yesterday from Ted, that it

[Matt Walker (Chair)]: was already been spending and is continuing to be spent.

[Chris Keyser (Member)]: My only issue there, well, doesn't matter, but the idea is that a lot of times we fund things, but then they don't spend it right in that year. I'll

[Logan (Joint Fiscal Office analyst)]: leave it there. Thank you.

[Matt Walker (Chair)]: Anybody else?

[Josh Hanford (Vermont League of Cities and Towns)]: Anyone? Ask. I

[Matt Walker (Chair)]: guess the question I have right now is our vice chair is suggesting that we ask the alleged counsel to adjust the language, recognizing that this activity is already budgeted for. I just wanna go over the numbers again, because my understanding is that there was that 1.3 sort of

[Timothy R. Corcoran II (Vice Chair)]: included that reappraisal, right? So we

[Matt Walker (Chair)]: took that out, you've got behind it at 1.3? It would be higher if they didn't have that expense, I guess, when expecting that they're going Yeah,

[Timothy R. Corcoran II (Vice Chair)]: I I trying to propose that we're doing the same thing. Did you anticipate that going forward too or no? Because I was just saying I

[Matt Walker (Chair)]: thought we were planning it at some point, that the cost of that would eventually go away, but I don't know that. I know that other people are going after that money. I

[Timothy R. Corcoran II (Vice Chair)]: was just doing the numbers in my head and I was like those are the core four, anything after that would be considered a surplus Cause that's how you get to 1.3, right?

[Matt Walker (Chair)]: With this included. Yes, with that included.

[Timothy R. Corcoran II (Vice Chair)]: So that's why I was saying, all right, let's set those, those needs to be paid out, then anything after that going forward would be good, but it sounds like there are.

[Matt Walker (Chair)]: Regardless that wish it wasn't there, but it either.

[Timothy R. Corcoran II (Vice Chair)]: Like I said, I'm just trying to make it more attractive because it's going to be a hard sell when it goes right next door. And if we do or don't include that, it's really going to make it upsetting So way or the I'm just trying to make it more appealing, give us a good shot to say, hey, we considered all the factors and we think this is the best avenue, but if they're pushing for it over there and take it out, and then we said, all right, we want 50%. I'm

[Matt Walker (Chair)]: expecting it. From my perspective, I don't think we can win the fight on the 3.4. That's gotta be paid, and then we get the

[Timothy R. Corcoran II (Vice Chair)]: three That's what I was getting at. It's just like, all right, let's just put it in there. Only four as it's currently allocated.

[Candice White (Member)]: Yeah, through '27.

[Damian Leonard (Office of Legislative Counsel)]: We'd have to deal with it

[Timothy R. Corcoran II (Vice Chair)]: after that? No, basically what I'm saying is that the way this would be written is we're sort of setting pilot fund to be funded at. So either we put it in or we don't, but unless we're just talking about doing it,

[Logan (Joint Fiscal Office analyst)]: you really can't do it here

[Timothy R. Corcoran II (Vice Chair)]: by here.

[Matt Walker (Chair)]: No, so if we don't include it, we know we're gonna have a huge battle. Battle. So it needs to be understood that that money's already been spoken for.

[Candice White (Member)]: And are you saying That's

[Matt Walker (Chair)]: what I think, because I don't think we're going anywhere if we don't. I think we lose the whole opportunity of the argument. I could be wrong. Maybe everybody wants to go to the floor and fight that, but we're gonna have to amend it back into our own bill, because that's all come it's gonna come out next. I maybe we should take a break. I don't know. But Yeah. Representative William?

[Candice White (Member)]: I'm just I just wanna clarify. Are you so representative Corcoran, are you suggesting to keep reappraisal and listing payments in in perpetuity, or just through what we are seeing is in the proposed FY27 budget?

[Timothy R. Corcoran II (Vice Chair)]: No, all of these would be in perpetuity because we're setting policy. So you have to say what is gonna be surplus. You can't do that year by year,

[Logan (Joint Fiscal Office analyst)]: it would have

[Timothy R. Corcoran II (Vice Chair)]: to be set. But I guess maybe we should take a break to figure out what the absolute goal is of them moving into the pilot. Was there until, you know, expectation was a one year attained. I if that's the case, then I wouldn't put it down on motion, I would take it out and say, all right, we only have three that

[Phil Pouech (Ranking Member)]: are figured in there.

[Timothy R. Corcoran II (Vice Chair)]: I just don't know the answer I to

[Phil Pouech (Ranking Member)]: thought we had heard that this tip free came out of the general fund. No, correct. And now they're taking it from here.

[Timothy R. Corcoran II (Vice Chair)]: No, no, that's correct, but just in them doing that, is that they're like playing for Is this

[Matt Walker (Chair)]: a $3,400,000 every year? Yeah, every year. Can see some expense that goes on into prostituting. Yeah, yeah, I'm just

[Timothy R. Corcoran II (Vice Chair)]: saying I just don't want to battle that issue, but if they're thinking it's just a one year, then I have no thought taking it out, I just don't know their thought process behind what they were thinking when they put it in there, you know?

[Matt Walker (Chair)]: Makes a huge difference in the

[Candice White (Member)]: of money

[Matt Walker (Chair)]: that will go, but it also makes a huge difference in what we will get any opportunity to move forward or none.

[Candice White (Member)]: I would just propose, I am in full support of not changing what is currently proposed in what DAA has done, but in FY27, but FY28 reiterating the four payments at the top and not the reappraisal enlisting payments going forward. I mean, I suppose it could be rejected or amended, but I'd love to lead with that. We're not gonna ask you to change anything you're doing, but just going forward for fiscal year twenty eight, that doesn't seem like an appropriate use of pilot surplus. Here's what we think is appropriate use.

[Matt Walker (Chair)]: I think that at this point, we're going take a five minute break so you can find out the answer to that question, whether it's an ongoing year after year thing, or if this is a project that is going to end with a statewide reappraisal of everything. Is that what's going on?

[Timothy R. Corcoran II (Vice Chair)]: Yeah, like I said, I just don't need to go down that road for that argument. In my opinion, Ben, I know what you're saying, but it might get a little convoluted too. It's like, all right, we've got to do it this year, and the next year we'll take it out. Usually when you said something, said it. Like I said, I'm not wedded to it. Was just trying to give us our best opportunity.

[Candice White (Member)]: Mean, I've had it, they're minority, they see extra money, and we're short on money,

[Logan (Joint Fiscal Office analyst)]: so

[Candice White (Member)]: they're spend it. So that makes sense, but let's also think we're saying, well, that doesn't feel like the appropriate Are

[Matt Walker (Chair)]: there other concerns about this language?

[Timothy R. Corcoran II (Vice Chair)]: Only question I had are we're not resetting the floor on this, right? Like we do with our inflator. Like every year, you're locked into that. So this doesn't

[Damian Leonard (Office of Legislative Counsel)]: This is separate and apart. So the language It's

[Timothy R. Corcoran II (Vice Chair)]: just booster, but it doesn't reset before the next one. It doesn't? Okay.

[Matt Walker (Chair)]: Maybe 65. Yes. No.

[Damian Leonard (Office of Legislative Counsel)]: Yeah. It's in addition to the amounts appropriated under the regular inflator, and then it provides that the amounts of additional money coming from the pilot fund would not decrease the amount appropriated on that or be subject to the annual inflationary adjustment. Okay.

[Logan (Joint Fiscal Office analyst)]: All right.

[Matt Walker (Chair)]: We're gonna take a seven minute break to try to find out this answer. We're coming back 10/25, which probably stretched to 30. And we're going to try to find out the answer to this and then we'll get back to marking up other options on the T bill. We're adjourned for the next seven to ten minutes. Thank